bearish harami

 

A bearish harami is a candlestick pattern that can indicate a potential reversal in an uptrend, signaling a possible downturn. And it is formed at the top of the trend characteristics:

1. Two Candles:

• The first candle is a large bullish candle, indicating that the market has been moving upwards.

• The second candle is a small bearish candle (or sometimes a doji), which is fully contained within the body of the first candle. This means the open and close of the second candle are within the range of the first candle's body (not the shadows).

2. Trend Context:

• It occurs after an uptrend or a period of rising prices, suggesting a potential reversal of the upward movement.

3. Significance:

• The pattern indicates weakening bullish momentum, as the small bearish candle suggests indecision in the market, with buyers losing control.

• The market may be ready to change direction, especially if followed by additional bearish price action.

4. Confirmation:

• The bearish reversal is often confirmed with a downward move after the pattern appears. Traders typically wait for a third candle to confirm the pattern before making decisions.